Las Vegas Sands 1Q profit lower than expected

AP News
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Posted: May 03, 2011 6:40 PM
Las Vegas Sands 1Q profit lower than expected

Escalating revenue at resorts in Macau and Singapore helped return casino operator Las Vegas Sands Corp. to a first-quarter profit, but the earnings it reported Tuesday fell short of Wall Street expectations.

Sands' shares plunged almost 10 percent after hours.

The company led by billionaire CEO Sheldon Adelson reported net income of $228.2 million, compared with a loss of $28.9 million a year earlier. It said its earnings amounted to 37 cents per share, excluding one-time items, but analysts were looking for 43 cents per share on average, according to FactSet.

Sands' revenue of $2.11 billion, up more than 50 percent from a year earlier, squeaked past the $2.1 billion analysts expected on average.

The company's shares fell $4.47, or 9.7 percent, to $41.40 after hours. They had ended regular trading down $1.64, or 3.5 percent at $45.87.

During a conference call with investors, Adelson immediately faced questions about whether the company was disappointed in its new Singapore casino's first-quarter performance.

"You're talking about very substantial amounts of money," Adelson said. "Pretty soon Singapore will deliver more (earnings) than the entire Las Vegas Strip."

Adelson, who has remained optimistic about the company his family controls, even during much steeper stock dips in the past three years, said Sands is pleased with its results in China's gambling enclave of Macau and sees even more potential there.

"We have the largest footprint in the largest gaming market in the world and we are eager to take advantage of the significant organic growth opportunities in front of us," Adelson said. "I have no doubts that we will achieve even greater success in the months and years to come."

Sands said its Macau revenue grew 22.6 percent to $1.16 billion for the quarter. It saw revenue of $584.9 million for the quarter in Singapore, where its Marina Bay Sands casino opened during last year's second quarter.

The company's revenue in Las Vegas was $305.1 million, down almost 8 percent from a year earlier, and its casino in Bethlehem, Pa., where a 300-room hotel tower is expected to open this month, brought in revenue of $91 million, up 35 percent. The casino at a former Bethlehem steel mill opened in May 2009.

Adelson blamed bad luck in Las Vegas and Singapore for drops there in the company's hold percentage _ the ratio of how much it won to how much customers gambled.

"One month of low hold doesn't make a year," Adelson said. "But think about having the entire Las Vegas Strip resident in two casinos (in Singapore), and we split that up."

Sands said it had $3.13 billion in unrestricted cash, with another $658.9 million allocated mostly toward construction in Macau. The Las Vegas-based company said its total debt was $10.1 billion, with $652.3 million due this year.

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Oskar Garcia can be reached at http://twitter.com/oskargarcia.